Microsoft spent a lot of money developing avatars and this "new Xbox 360 experience" but they will soon find out what many Wii owners found out. The Miis are cool, but can become stale very quickly...it is temporary fun and not something to build an E3 show off of.
Microsoft should of just left that alone...the Miis or Home are not going to be a huge selling point for either Wii or PS3.
Nothing else in the show excited me. Though I will say, that the Mortal Kombat vs DC had made me throw up on the inside. I love my DC and that is just destroying everything I love about DC.